Financial Crime World

British Virgin Islands Toughens Stance on Money Laundering, Terrorism Financing and Fraud

The British Virgin Islands (BVI) has taken a significant step in combating financial crimes by introducing stringent laws and penalties for money laundering, terrorism financing, and fraud.

Combating Financial Crimes through Predicate Offences

Predicate offences under the Proceeds of Criminal Conduct Act 1997 and the Drug Trafficking Offences Act 1992 are key to addressing these illicit activities. The BVI has adopted an “all crimes” approach to predicate offences under its anti-money laundering (AML) and terrorist financing regime, excluding foreign crimes that are not criminal in the territory.

Penalties for Money Laundering, Terrorism Financing, and Fraud

Individuals found guilty of money laundering, terrorism financing, or fraud can face severe penalties, including:

  • Up to 14 years’ imprisonment
  • A fine of up to $500,000
  • Both imprisonment and a fine

Those convicted of fraud under the Criminal Code may be sentenced to up to 10 years’ imprisonment.

Plea Agreements and Defences

The authorities have introduced plea agreements as an option for offenders, with the director of public prosecution having discretion to accept or reject these deals in exchange for reduced sentences. Parties accused of money laundering, terrorism financing, or fraud can also raise various defences, including:

  • Consent defence
  • Notification defence
  • Statutory defence where a party reports a suspicious transaction to the Financial Investigation Agency (FIA)

Record-Keeping and Disclosure Requirements

The BVI has implemented strict record-keeping and disclosure requirements under the Anti-Money Laundering Regulations 2008. Relevant persons are required to maintain records of:

  • Transactions
  • Reports made to the FIA
  • Inquiries received from the agency

Compliance Measures for Companies

To ensure compliance, companies are advised to:

  • Establish internal systems and controls
  • Conduct customer due diligence measures
  • Practice good record-keeping
  • Provide employee training

Private Actions for Damages

Private individuals can bring actions for damages arising from money laundering, terrorism financing, or fraud in the BVI courts. The court may award damages calculated to put the aggrieved party in the position it would have been in had the breach not occurred.

Additional Remedies

The court may also award other remedies, such as:

  • An injunction
  • Account of profit
  • Rescission
  • Rectification

to successful claimants.

Strengthening Reputation as a Responsible Financial Centre

The introduction of these measures is seen as a significant step forward in the fight against financial crimes in the BVI. It is expected that they will help to strengthen the territory’s reputation as a responsible and transparent financial centre.